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Debate on the 2011-12 state budget is in full swing, as the House passed and sent to the Senate a fiscally responsible spending plan that holds the line on taxes and government spending.

H.B. 1485 was approved on May 24 by a vote of 109-92. The General Fund budget bill was modeled after Gov. Tom Corbett’s budget, which he unveiled in March, and which proposed a spending level of $27.3 billion. The 2008, pre-recession spending level takes into account the grim economic realities of Pennsylvania’s $4.2 billion deficit and a still challenging economy.

While the House version shifts money from the governor’s proposed Department of Public Welfare appropriation to increase spending levels for education, it maintains the $27.3 billion spending limit called for by Corbett.  House leaders have committed to finding waste, fraud and abuse within DPW and defunding programs for which fraud/abuse has been identified.

House Bill 1485 now contains an additional $243 million for education, including basic education funding, accountability block grants and social security payments. It also would restore 10 percent of the governor’s suggested funding reductions for state-owned and state-related colleges and universities.

The Senate must now take up the budget bill.

Issues that remain to be decided include the final spend number – Senate leaders have hinted that it might be slightly higher – and whether a portion of the unexpected $500 million+ revenue surplus from the current fiscal year will be used to restore certain program cuts, or to replenish the state’s Rainy Day Fund and pay down state borrowing debt.

As negotiations continue, PA Chamber members will remain consistent in their a call for a fiscally responsible budget that recognizes Pennsylvania’s structural deficit, wisely addresses the unexpected revenue surplus, and reins in high levels of government spending that has grown beyond taxpayers’ ability to pay.

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The Pennsylvania Chamber of Business and Industry is the state’s largest broad-based business association, with thousands of statewide members representing businesses of all sizes and all industry sectors. The PA Chamber is The Statewide Voice of Business™. More information is available on the Chamber’s website at www.pachamber.org.